What Is The Right Way To Perform Competitive Analysis For Your Business
Business

What Is The Right Way To Perform Competitive Analysis For Your Business

Whether you are a new business or several decades old, it is never too early to start a competitive strategy together. Understanding the strong zones and weak zones of your business competitors is very crucial if you wish to be successful in a business. This knowledge is very important to get your target customers.

To completely grasp the market where you operate, you must perform a competitive analysis. Fortunately, it is not very difficult as you think it to be. There are some ways which will help you perform competitive analysis in the right way. 

What do you mean by a Competitive Analysis?

A competitive analysis is a kind of an elaborate survey of the businesses that is designed to identify theirs as well competitor’s strengths and weaknesses. It is not just keeping a tab on your competitor but also using them as a way to reach their customers. 

The feedback that you gain from the customers of your competitor holds a lot of opportunities to make your marketing strategy more accurate and impactful. In the end, this analysis saves your time and money on creating valuable ads.

Competitive analysis gives specific hints that tell you the type of design, copy choices and audience to make your advertisement. Give your marketing strategy a boost by learning what to put in an advertisement that will either attract an audience to your services and product or push them away from the competition.

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Things that make competitive analysis significant

The information that you gained by competitive analysis is important for several reasons:

  • Build more potent and influential marketing strategies
  • Innovate your services and products
  • Develop a highly relevant and dynamic workforce
  • Figure out challenges prior to getting affected by them
  • Recognize your new customer base 

What are the steps needed to perform a competitive analysis?

Acquire Information

To conduct thorough competitive analysis, you first require understanding what you need to analyze. Some of these things are: 

  • The businesses with which you compete 
  • The services and products they offer
  • The market share of competitors
  • The strategies used by them in the past
  • The strategies that are currently being used 

Create a Competition Grid

With all this relevant information available to you, you should use it to form a competition grid. This is a simple tool that makes it quick and easy to compare your business with your competitors.

All you need is to take a pen and paper and write 4 or 5 services or products that have competition in the market. There is no business that doesn’t have competition. This study helps you to visualize what your customers would purchase if they did not purchase what you have offered to them.

On the top of the paper, you should write down all the primary characteristics and features that are associated with the service or product. These include things such as:

  • Target market
  • Size
  • Price
  • Distribution method
  • Level of customer service

If you are examining a service instead of a product, then you can include criteria such as.

  • Prospective buyers
  • Price
  • Availability 
  • Contact methods

Once you see that your grid is fully complete, you have a clear visual reference that shows the services and products that entice the same customers that you wish to attract. In addition to this, you will also see at a glance about the weaknesses and strengths of each entry.

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Strategic planning

A competitive analysis is a mere tool that assists you to plan for the future. If you make one but don’t use it with information, then it will be a useless exercise. You need to take the information that you have collected, and use it to start clearing your strategies for long term, short term and mid-term goals. If you have performed this analysis in a thoughtful manner, then it can prove to be a beneficial resource to expand your business.

Tell your customers about your strengths

Now that you are aware of the stronger zones of your business that makes your business advantageous than your competitors, you need to let all your existing and future consumers know about it. You can get assistance from a strategic marketing expert to guide you the right way to go about it.

Advantages of a competitive strategy

Competitive strategy helps you learn about your competitors. They have the same type of customers as your business has, share similar goals, and have tie ups with other relevant businesses. Knowledge about these things helps in making money. They can be the perfect mentor for you. Acquiring positive qualities from them can make your business flourish.  The type of research that you need to perform is:

  • Areas at which they are performing better than you. This will help you make enhancements in your business.
  • The type of marketing tactics and strategies that are working for them
  • The type of mistakes that have been made by them and the ways to avoid them
  • The things that you are doing better than them. This would help you to promote those things

All these insights can really make an effective competitive strategy. It will strengthen your overall business plan. Due to the advantages it offers to a business, it must be a part of the social media marketing strategy of a business. 

Types of competitors

There are mainly two types of competitors that a business should consider. First are those who are into the same sector as that of your sector and offer the same set of products or services like yours. Second are those who offer different services or products but compete for the same dollar.

Types of questions to ask when performing competitor analysis

You must continuously ask yourself about what are those things that differentiate your business from others. There are a few questions that you need to start off with:

  • Who are the key players performing in this market?
  • How is the market divided between them?
  • What type of opinion does the market have about these competitors?
  • What type of experience do they offer?
  • How does their service or product look and feel? 
  • How does the business work?
  • How do they deliver?
  • What are their charges? 
  • How do customers order? 
  • What type of reviews do they get from them?

Learn about your competitor weaknesses and strengths

As you become aware of your competitors more and more, you will soon notice which one of them is a big challenge for you. They might be in your work zone, or they may aim at a similar market segment as yours.  Differentiate between different competitors on the basis of its weaknesses and strengths.

  • Great distribution – they are all over the place and in all types of shops
  • Huge brand awareness – they have been around for several decades and have a big reputation in the market. People have a lot of trust on them
  • Good networks – They have built a good repo with several buyers
  • Low price point – It is simply impossible for your business to compete on the level of price

Weaknesses:

  • A poor reputation 
  • Cheap level of packaging 
  • Bad consumer reviews 
  • Poor customer service 

By understanding strengths and weaknesses of your competitors, you can determine the things that differentiate you and where do you fit in the market.

What are the advantages of your business?

When you are performing a competitor analysis, you must consider all your advantages. There can be several things in your business that other businesses can’t replicate. Some of them can be:

  • Patents or licenses
  • Exclusive supply arrangements
  • Special processes
  • Lower costs

Conclusion

Competitor analysis assists with your business planning, your service or product development and marketing efforts. A genuine and reliable review of your competitor and their strengths and weaknesses will aid you find the market that you can own. All this information would help you figure out where you stand in the market, and in what ways can you maximize that position.